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Traditional computer infrastructure setup is fairly straightforward: buy the equipment, set up the data centers, plan for future capacity needs, and add or change systems as required. Applied in another sector, it amounts to: “You want power? Build a local generator.” Efficiency improvements are possible, and the US military has been moving to consolidate its server applications as part of that effort. Some civilian sectors have been there and done that – and are now moving toward a different model of computing as a service or utility.
Under that model, those operations are contracted out under an agreement that stipulates certain levels of performance, quality of service, et. al. It requires a different set of skills to manage, shifts risk toward the vendor, and isn’t exactly like the classic utility model because transfer to a different provider is much more difficult and complex. Nonetheless, it does represent a very different approach to addressing I.T. needs. If it works, “utility computing” or “service-based computing” lets I.T. departments add capacity much more quickly, and frees them from the expensive and time-consuming chore of managing servers. Let the vendor who built them do that, goes the thinking, and discover incentives to create or configure computers that need less babysitting. If this sounds like it has parallels with Britain’s “Future Contracting for Availability” approach to defense equipment, that’s because it does.
The USA’s Defense Information Systems Agency (DISA) started its move toward a service-based environment in July 2006. A $17 million award to IBM for the agency’s Net-Centric Enterprise Services (NCES) contract will provide DOD customers with instant messaging, low-bandwidth text chat and Web conferencing on a managed service basis. That move has since picked up speed, via over $1 billion worth of fixed-price service contracts under a “utility computing” model…
On October 18, 2006, DISA officials at an IT industry conference announced contracts worth over $700 million to 4 vendors to provide it with server capacity at its 18 data centers: 17 in the USA and one in Germany, which contain over 5,000 total servers. Rather than buying server hardware et. al. going forward, DISA would be paying the vendors for processing services on an hourly basis.
Winners included HP in Palo Alto, CA; Sun Microsystems Federal Inc. in McLean, VA; Apptis Inc. in Chantilly, VA; and Vion Corp. in Washington, DC.
DISA will maintain control over data center operations, but the vendors will provide some onsite support and other assistance from remote locations. As technology evolves to offer new operating system releases and new hardware, the job of deciding on and managing upgrades largely belongs to these 4 contracted firms. All that matters is the required levels of service and performance under the contracts – which is why one of the most critical new skills on the buyer side becomes deciding on and managing those metrics, then creating a contract that provides strong incentives to meet them without bankrupting either the buyer or the service provider.
expeditionary utility?
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Within DISA, this move was seen as just the first step.
In one sense, it’s a first step toward an even more hands-off model for future data centers that builds experience with a utility computing model on both sides of the fence.
It would also prove to be a first step toward other contracts along this model. A follow-on storage-on-demand contract was expected in November or December, under a model that would let the DISA pay for actual computer data storage used on a monthly basis. Alfred Rivera, DISA director for computing services, was even quoted as saying that he envisioned future contracts that would apply the centralized service/utility model to software – a situation sometimes referred to as an Application Service Provider, or ASP model. CIO John Garing went one step further, and said that in addition to software, bandwidth would also be purchased this way in future.
Time will tell.
Contracts and Key Events
April 6/07: DISA won’t issue a RFP for its Service-Oriented Architecture Foundation (SOAF) project, as it originally announced, but will handle the project under ITES-2 instead. DISA’s Net-Centric Enterprise Services (NCES) initiative reached Milestone B in March 2007, and the SOAF project was scheduled to bring it to Milestone C by March 2008.
FCW reports that some contractors had already stood up teams to develop competition strategies for the expected SOAF RFP, but during the winter, DISA decided that a full and open competition for SOAF would make it impossible to meet the NCES deadlines. The complications created by 2 rounds of ITES-2 protests played a strong role in that decision: “We couldn’t take the risk of [the SOAF award] being protested, because that would prevent us from reaching Milestone C,” a DISA spokesman said.
So, the very protest vehicles meant to give smaller firms more leverage and a fair shake at federal contracting processes are used by larger firms, and end up having an anti-competitive effect by moving more awards under larger vehicles, which of course are especially well suited to larger firms. Ironic, but not surprising to those who have been following public policy theory developments over the last 30 years.
Feb 1/07: The VION Corporation in Washington, DC received an indefinite-delivery/ indefinite-quantity firm-fixed price performance contract with a ceiling amount of $700 million and the minimum guarantee of $1 million. The purchase is part of Defense Information Systems Agency (DISA) Enterprise Storage Services (ESS) contract, which seeks to shift DISA’s data centers toward more of an “on demand” utility model.
The period of performance is for a 5-year base period with three 1-year option periods. Performance will be at any of the current 17 Defense Information Systems Agency (DISA) computing service data centers including Hawaii and an OCONUS location of Patch Barracks, Vaihingen, Germany, or future DISA approved locations. The solicitation was issued as a full and open competitive action, and 3 proposals were received by the Defense Information Technology Contracting Organization, (DITCO) at Scott AFB, IL (HC1013-07-D-2009)
Oct 18/06: DISA officials at an IT industry conference announce contracts worth over $700 million to 4 vendors, to provide it with server capacity at its 18 data centers: 17 in the USA and one in Germany, which contain over 5,000 total servers.
Rather than buying server hardware et. al. going forward, DISA would be paying the vendors for processing services on an hourly basis. DISA will maintain control over data center operations, but the vendors will provide some onsite support and other assistance from remote locations. As technology evolves to offer new operating system releases and new hardware, the job of deciding on and managing upgrades in order to maintain specified levels of service largely belongs to these 4 contracted firms. Winners included:
* HP in Palo Alto, CA was awarded 2 separate deals, worth up to $440 million over 8 years. Their services will cover servers running their HP-UX unix operating system, as well as Microsoft Windows, Red Hat Enterprise Linux, and Novell SUSE Linux.
* Sun Microsystems Federal Inc. in McLean, VA received a contract worth up to $125 million that covers servers running various versions of its Solaris OS.
* Apptis Inc. in Chantilly, VA received a maximum $110 million contract that covered mainframe computers running IBM’s z/OS and z/VM.
* The smallest award went to Vion Corp. in Washington, DC. The storage and server provider would manage IBM’s AIX unix operating system under a contract worth up to $25 million.
July 13/06: IBM wins a $17 million contract to provide net-centric collaboration services to the US Department of Defense. Capabilities provided will include instant messaging, low-bandwidth text chat, and web conferencing. Instant messaging and web conferencing both include audio and video support, while web conferencing adds shared whiteboards, desktop/application sharing, and the ability to invite non-DoD personnel into collaboration sessions. The roll-out will be coordinated under DISA’s Net-Centric Enterprise Services (NCES) program. See DISA release. NCES was later abandoned as its own contract, and rolled under ITES-2; see Apr 6/07 entry. IBM is an ITES-2 award winner, so its position remains unaffected.
DISA also announces that “In addition to this award, it is DISA’s intent to acquire a second commercially-managed collaboration service, promoting a ‘two-button’ approach that will foster competition between service providers.”
Additional Readings & Sources
* IBM Systems Journal (Vol. 43, #1 March 2004) – Utility Computing. Excellent resource, with lots of good articles for systems managers and executives.
* Utility Computing.com. You knew this had to be out there. The ongoing newsfeed is especially interesting if you’re following developments in this area.
* HP – IT Utility Consolidation
* IBM – Flexible hosting services (Utility services). See also their Grid Computing and their Applications on Demand pages.
* Sun Microsystems – Managed Services. See also their GRID utility computing section, and their new “Blackbox” containerized data centers (article | Sun page). The latter may become a useful component for an expeditionary military that needs shippable, protected, on-demand computing and faces a long-term bandwidth crunch over its WAN.
* ViON Corp – Solutions
* Network World (Jan 12/03) – How to: How to get to utility computing
* FCW (Jan 31/07) – DISA picks Vion for ‘on demand’ storage buy
* AEC (Nov 1/06) – DOD pay-per-use IT contracts worth up to $700M
* FCW (Oct 30/06) – DOD begins major shift to utility computing
* Washington Technology (Oct 24/06) – Contracts totaling $700M will ensure DISA is on demand
* Government Computing News (Oct 24/07) – DISA, on demand
* FCW (Oct 23/06) – DISA to treat commercial software, C2 apps as utility service
* FCW (Oct 6/06) – DISA chooses pay-per-use approach for servers
* DISA (July 13/06) – DISA Selects Net-Centric Collaboration Service Provider
* DID (June 23/06) – U.S. Army Moves to Consolidate App Servers